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VANCOUVER — When Pretium chief executive Bob Quartermain went on an investor road show after forming the company to explore two gold projects in northwestern B.C., his first stop was Shanghai.

The city’s international airport happens to have the same identifier code — PVG — as Pretium’s ticker symbol on the Toronto Stock Exchange. The detail was not lost on Quartermain, who says Asian demand for the yellow metal should underpin and drive gold prices in coming years.

“What we’re seeing is the slow and systematic movement of physical gold from the West to the East,” Quartermain said in a recent interview at his Vancouver office.

His assessment is backed by a World Gold Council report released Monday. Surging Chinese demand in 2013 saw China pass India as the world’s largest gold market, according to the report.

The rich veins in a mountainous area called Valley of the Kings on Pretium’s Brucejack project could provide some of that gold. The project is now in the permitting stage and Pretium will soon apply for its environmental assessment certificate, said Quartermain.

He doesn’t anticipate any issues on that front — nearby Brucejack Lake has no fish (the closest fish are 22 kilometres downstream, he says) and the remote operation would be an underground mine, reducing its surface footprint.

Pretium has established good relations and commercial relationships with First Nation groups in the area, Quartermain said. That extended to learning basic phrases in the Nisga’a and Gitxsan languages, which he used to greet local chiefs during meetings a year ago — to mixed results.

“They said they appreciated the commentary, but that I needed to improve on my dialect a little bit,” he said with a smile.

If all goes according to plan, starting in 2016 the Brucejack mine will produce an average of 321,500 ounces of gold annually over a 22-year mine life, and provide some 500 full-time jobs (800 during construction). A power line running south will link the mine to the grid near Stewart, and an existing access road connects Brucejack to Highway 37 to the east.

The project is already a major player on B.C.’s mineral exploration scene — Brucejack has accounted for 15-20 per cent of total exploration spending of $1.16 billion over the past two years.

Quartermain’s journey to northwestern B.C. started in St. Stephen, N.B., where he grew up. It passed through the University of New Brunswick, where he obtained a bachelor’s degree in geology (and where students now study at the Quartermain Earth Science Centre, established with a $1-million donation). He later earned a master’s degree from Queen’s University and explored for gold and uranium in Canada’s North.

The Maritimer got an early taste of the West Coast when he met legendary mining promoter Murray Pezim in Ontario’s prolific Hemlo district, where the young geologist was drilling the David Bell gold mine for Teck. When Pezim flew in to visit, Quartermain spray-painted a shovel gold and presented it to Pezim, who made it a fixture at his Vancouver offices.

“He was quite a colourful character,” Quartermain recalled.

In 2009, Quartermain was honoured by the Association for Mineral Exploration B.C. with an award in Pezim’s name — the Murray Pezim award for mineral-exploration finance. (Another Pezim play, Eskay Creek, 20 kilometres north of Brucejack, became a high-grade gold mine operated by Barrick.)

Quartermain’s move west took shape in 1985 when he jumped at an invitation from Norman Bell Keevil, then Teck’s CEO (now chairman).

“Dr. Keevil asked me if I’d like to come to Vancouver and take over Silver Standard, which at the time had one employee, the secretary, a few assets, and needed direction,” Quartermain said.

In 15 years, he and his team grew Silver Standard from a $2-million market capitalization to a $2-billion company with an international portfolio of assets. Much of the team migrated over when he formed Pretium to buy Silver Standard’s Brucejack and nearby Snowfield property in December 2010, including Pretium’s chief exploration officer Ken McNaughton, Silver Standard’s third employee.

Quartermain uses the term “unique” a fair bit when talking about Brucejack, and a craggy boulder on the boardroom table offers clues why. Veins of gold/silver mineralization snake through the heavy rock, and specks of the yellow metal are also visible.

The rock, retrieved during underground blasting, contains more than 1.5 kilograms of gold, according to Quartermain. That’s about 50 troy ounces, worth more than $66,000 US at current gold prices. While global grades at producing gold mines average about one gram of gold per tonne, Brucejack’s resource weighs in at more than 17 grams per tonne.

“Most gold mines in the world would need 400- or 500-tonne trucks for the amount of gold that you can hold in your hand,” he said.

The uniqueness of that high-grade gold system, however, also triggered a resource estimate controversy that rocked mining circles and battered Pretium’s share price in early October.

That’s when Strathcona Mineral Services, the engineering firm hired to oversee a 10,000-tonne bulk sample at Brucejack, quit the project and questioned the gold resource.

Since Brucejack contains extremely high-grade veins within an area of lower-grade gold, measuring the average grade on the property is a challenge. Methodology was at the root of the disagreement between Strathcona and Snowden, the firm that had prepared the original Brucejack resource estimate and that took over the bulk sample from Strathcona.

The market reacted violently to the news. Pretium stock plunged from $7 to the $3 level as U.S. hedge funds shorted (bet against) the shares, which are also listed on the New York Stock Exchange. Several U.S. law firms filed class-action lawsuits (which “have no merit” and are being vigorously defended, Quartermain said).

It was a wild ride for Pretium shareholders — including Quartermain, who owns about 2.6 per cent of the stock, purchased at market prices.

When the entire bulk sample was processed, however, the results provided validation: the 10,000 tonnes yielded 5,865 ounces of gold, well above projections of 4,000 ounces.

“I’ve been in the business for 30 years, and you have many ups and downs within it, and you must continue just to maintain your focus,” he said. “We’ve moved beyond Strathcona.”

The gold price, about $1,400 US an ounce when Pretium launched in December 2010, has been on its own roller-coaster ride. It peaked at about $1,900 in 2011, but has declined since to about $1,300. The shares of most junior mining companies have also been battered in the past two years.

Despite the precious metal's recent weakness, Quartermain thinks the gold bull market has further to run. If — as many believe — China’s central bank is accumulating the metal as part of a plan to develop a gold-backed reserve currency to challenge the U.S. dollar, that will also underpin the price, he noted.

“The Chinese have an affinity for gold. They take a very long-term view on the gold price. They have a lot of the cash as their economy grows.”

Pretium shares, which were priced at $6 in the initial public offering and hit highs above $17 in early 2012, closed Tuesday at $6.22 on the Toronto Stock Exchange, giving the firm a market value of about $675 million.

The company’s next milestone, expected by June, will be an updated feasibility study that incorporates December’s resource estimate. The study is being done at conservative metal price assumptions — $1,100/oz. gold and $17/oz. silver. The project has been stress-tested down to $800/oz. gold and is still quite profitable at those levels, Quartermain said.

The company’s latest hire was chief operating officer James Currie, who led construction of New Gold’s New Afton gold mine west of Kamloops.

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